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tv   Asia Edge  Bloomberg  October 4, 2016 11:00pm-12:01am EDT

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♪ john: this is john heilemann and vicehalperin back at the presidential debate come on the one and only as we have been reminded tonight. broadcasting live on bloomberg television and also on twitter. give us a sense of how you think this went tonight. i thought mike pence did a phenomenal job. it there is a huge contrast. you saw tim kaine 64 times interrupting. debater.n as a master
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most opponents that he previously faced, watch out when tim kaine comes in. he was flustered and off his game. mike pence came with his a game and demonstrated a contrast. the important thing for voters to understand that the single most important thing a presidential candidate does is choose their vice presidential candidate. tonight, donald trump proved that the kind of people he will put around him are people like mike pence, solid, solution-oriented folks. mark: thank you, and i know some are agreeing he had more good moments. is there a single good moment you would point to, hoping that is what gets replayed over and over. >> there are several. a couple one line zinger is, the he said, you have worked on that a lot. i think the substantive
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exchanges, where he bested him on contrasting his record in indiana bringing down taxes and unemployment, two tim kane'-- kaine's record of bringing up on employment. would you prefer donald trump perform more like mike pence did tonight, or like the first debate? >> donald trump is not a politician, the more we focus on issues, the better. people are ready for change in this country. the more he can be an agent of change, the better. mark: you feel better after tonight then after the first presidential debate? >> i can sleep tonight. mark: thank you, the top advisor at the republican national committee, integrating the trump campaign. we do our closing minutes on the coverage on bloomberg to -- television and twitter.
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i was listening to the spin, republicans are skyhigh. democrats are not making excuses, but they are trying to justify. again, you probably cannot help it does give the barackcans, just like obama did, the sense -- obama had a horrible first debate in denver, maybe not quite as bad as donald trump's, he did not spend a week worsening the situation. so they needed a respite, to give them a sense of hope or a sigh of relief. had ahe way joe biden different style, because he debated in a different way. but he was able to give to feel like the sky was not falling. the sky is no longer falling on her head, but they will hold their breath again as they wait
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for sunday. mark: republicans will hope a couple things, but they have momentum, the donald trump looks at what mike pence did and seizes on those things. any will also hope there is ability to drive areas on taxes, on hillary clinton's record as secretary of state. mike pence knew had to take advantage of it, not just dialectically. and the thing about mike pence, a lot of people in the press mischaracterize amounts -- him but he has always been an optimistic politician. he was cutting and direct, but showed a lot. his closing statement symbolized the night, focused on commuting -- communicating to the people at home. of kaine made the mistake not doing it. john: also not seeming to know
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what camera he was speaking to. as a debater you must now because you are speaking to people outside the hall, what camera you should be talking to, not talking to the monitor, but to people out in americaland. mark: you could not say the tim kaine made a huge mistake, but in the harsh and unforgiving mike pence politics, delivered in tim kaine did not. it does not change the race in a fundamental way, but mike pence was at his best. john: we had jennifer and donnie, they clearly understood they had a spin job to do. i am curious whether in the next few days, how much focus there will be on the places where kaine pressed pence on things like taxes and russia, where pence decided he would not defend donald trump.
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just decided some of the best thing to do is just to stay quiet. how will those clips play, and what commentary will they engender? i will be interested to see it. mark: let's go back a site were said here on the campaign trail for closing thoughts. >> i think you hit the nail on the head, a win is a win. while it was not the landslide saw with hillary clinton over donald trump at hofstra, it was a nice and polished and disciplined performance for mike pence. we were talking before the debate about what his main mission should be. should he take on hillary clinton and try to score points on some of the issues that she like thele with, server and benghazi, or should he re-normalize the trump campaign and try to really get appeal to the base
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and undecided voters in swing states? it, the stroke them i be mike pence's genius is solidifying around, i will have a good faith message of our mission, and that may be enough to get much more enthusiasm and positivity behind his campaign as we head into what will be a a crucial time. will donald trump look at mike pence and see what he did, the preparation he put in, especially around and is on taxes and issues, and will he learn from that? we thank you for that. we will be hearing from some focus group set up and conducted some online instant polls, important for people not to pay attention to those. please do not do that. mark: and very good news for republicans, now sunday night gets built up.
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they need a big audience, they need donald trump to perform, but now they will get more excitement and media focus had mike pence not perform. from our colleagues a bloomberg television and our partners at twitter, we wish you a good night. we will see you on sunday in st. louis for that second presidential debate. have a great one. sayonara. ♪
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>> one of the finest ways to get to the other side of victoria harbour in hong kong. that is where we are, we are watching a mixed market in the middle of the asian trading day. we are live in hong kong, this is "asia edge." ♪
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>> the top stories this hour, stocks and bonds fall across the asia-pacific. new fed comments revive hype speculations. more bank issues, china has cut in along with mongolia. seconds in, the vice presidential candidates head-to-head, trump and clinton dominate the debate. google challenging apple, amazon, and oculus with new software. exclusively to a billionaire chairman for his take on the investment opportunities in indonesia.
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quarter, can it persist through the rest of the year? ahn. get you to shery >> we are seeing a mixed picture, the index swinging between gains and losses all morning. the nikkei up .6% for three consecutive sessions. a weaker yen right there. kong gaining .7%, searching for a third consecutive session. closed byhina mainland funds, pouring money into hong kong as we have more access to the market. we have a session with a weakening korean currency. gaining in the morning session, now down half a percent. one of the reasons for that must be we are seeing a pull down
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from those gold miners. the gold price has fallen the most in three years. 7%, now downthan 5%. evolution mining down almost 8%. zijin mining almost down 3%. not great for the bullion. the dollar reversing, three days of gains to fall .2%. in three the most weeks. having anng strength, impact throughout the markets as we see the strong dollar putting some pressure on local currencies, as well.
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this is the view from asia. >> hong kong dollar, up for a third straight day, it has been the hottestthis is the view fro. rally in asia. the view is that the marketeer will continue to lead the region through the end of the year. we had dividends last year, why are we seeing that? >> there is been a massive amount of money that is come to hong kong from the chinese mainland. these last three or four months has seen more net influx. since it started, i think the spring of 2015. it did not last long, the market came crashing down. it is also a function of markets on demand, not doing very well. cheaper valuations in hong kong. 4 andrically as well, q
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october specifically, have been very good for hong kong stocks. we are looking at historical data, there is no guarantee. back, with the exception of what happened in 2008, it has been up every single october over the past 10 years, up an average of about 5%. there was a lot of attention on this upcoming -- talk to us about valuations again, what are we seeing? >> there has been movement in the opposite direction from what we saw last year. valuations, when you look at hong kong, compared to pierce. , it is veryng cheap. whether that is comparing it to the rest of the world, who take emerging markets, for example.
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historically, you compare this. i think another bloomberg chart shows this. higher, little bit compared to the past four or five years. that is merely a function of the market being in a very sad state. we are not quite testing historical highs against itself, and against its peers. cheap, which is why people are expecting the market to remain supportive. angie: what are the risks to this view? everyone is convinced for various reasons. there are several reasons unique to hong kong. eventssales, commercial -- the positives, hong kong stocks are not really hong kong stocks. they get their major revenue from china. the second risk is that we will get the fed rate hike at some point. that is not exactly the best
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time to be borrowing cost increases. angie: and check out the latest retail sales, it is pretty dire. >> a lot of that is tied to incomes here. it is not the best time to see your mortgage rates go up. mentioned hasi come here in huge amounts that could quickly turn around. they are not the most stable of investors. hot money cooling down. david, thanks. rishaad: the vice presidential debates were quick to go on the attack in their first and only debate. tim kaine slammed donald trump on his taxes, mike pence went over hillary clinton's e-mail controversy. i think he is a fitting running mate for hillary clinton. in the wake of a season where american families are struggling in this economy under the weight
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of higher taxes and obamacare and the war on coal and the stifling avalanche of regulation coming out of this administration, hillary clinton and tim kaine want more of the same. we trust hillary clinton come my wife and i, with the most important thing in our life. we have a son deployed in the marine corps. we trust hillary clinton as the commander-in-chief. the thought of donald trump as commander-in-chief scares us to death. they were watching the debate along when university in virginia. who did better? >> we saw a very solid performance from governor mike pence. he made a lot of the points that donald trump did not. he prosecuted hillary clinton over her comment about trump supporters being deplorables, he was able to prosecute her over position at the clinton foundation and the donations they have taken from other parts of the world.
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he had a very strong debate performance. what we saw from senator kaine was a revival of a lot of the attacks secretary clinton made against donald trump last week. was able to perry a lot of those attacks. he had a very strong performance tonight. kaine,what about tim what kind of body blows was he able to land, if any? : he repeatedly repeated the comments of donald trump, sayinging from taxes, trump said he was smart not to pay federal income taxes, to attacking over the birther issue, to immigration, calling mexican immigrants rate this -- rapists and murderers. he used the words against pence
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and tried to get him to defend the things donald trump said. donald trump has offended a lot of people during the course of this campaign and senator kaine use this opportunity to defend those comments. he did his best to pivot from those comments and put them on the defensive. perhaps less colorful, but no doubt, very rich in policy. thank you for that. the world bank has new forecasts for asia, and the outlook for china. 6.3% in 2018. the bank has lowered mongolia's prospects the most in the east asia update. gdplargest increase in expectations. but everywhere it is seen as a risk. benchmark may be changing soon, one of the
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biggest stars, though not a merging member until next year. are saying the next rate hike won't be an easy decision and he wants solid evidence it is on the up. indy i would preferred that when we make our next move, communications would indicate subsequent increases will depend on changes in inflation indicators. i believe this would help assure the public this committee is seeking economic and financial conditions to support obtaining our 2% inflation target sustainably, symmetrically, and sooner, rather than later. angie: still ahead, global repercussions. we will talk about the impact a trump presidency could have on the japanese yen. hedging bets.ery this is bloomberg. ♪
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,"shaad: back with "asia edge looking to japan for an ideal hedge. the republican nominee might see the yen surged 100. japan as a hedge has inherent dangers, hasn't it? >> a very volatile currency, to put it mildly. breaking through 100, where we going to go? go to 75.t could >> or to 200. it depends what monetary policy in japan is going to be. trade seesawf that you have political risk in the u.s.. angie: it could go to 200. right now, the hedge, the story, is that traders are not expecting a republican victory. really buying into the pundits
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that trump lost the election, had an awful week last week. what of course, the pundits don't necessarily all vote or vote enough. trump's oddsk at as being calculated by different websites as roughly what the market was giving the bread is a the brexit- campaign. theaad: people are using brexit vote as a playbook for this? moment,dds given at the how much of a potential, systemic shock it would be. a knee-jerk response in equities and bond yields. short-term, i can see that if japan has not done anything before then, then yes, you could
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see a knee-jerk response for a much, much stronger yen. but i do not see it staying there. angie: how would you advise a smart hedge? your exposurewhat is, your risk appetite, and what you are trying to hedge over eight particular time period. angie: purely short-term around the election? >> i would say cash, over any asset. put it on the sidelines. because the tail risks growing increasingly fast everywhere we look. the downside is huge. minutes,in about 15 our group discussion talking about forecasts, -- thank you so much for that. let's do a quick check of the markets. a down day in new york, making itself felt this part of the world.
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china, hong kong is over. , we were talking about valuations. this is bloomberg. ♪
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rishaad: a look at our top stories, vice presidential candidates hit each other with exchanges. as combative as the debate to defend trumps choices, but he deflected to clinton's issues. the bloom -- the bank is likely to wind down after quantitative easing. that may happen in sets of 10 billion euros per month. they say it will continue until next march or beyond, if
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necessary. smartphones, ael role in assembling the iphone. phones, 9% ofded the global market. sales have plunged over the last five years. the shares, $79. news every day, in more than 120 countries and we are bloomberg. angie: let's get the latest on the markets. >> let's take a look at hong kong stocks because right now, they are the hottest in asia. hong kong shares surging. i want to talk about asia shares because they are gaining for third consecutive session, up .8%. they are boosted by oil and gas. along with a surge in the stocks we see here. we have seen big volatility
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among the shares. it is helped by these mainland funds at have access to the hong kong market. lunchcoming back from his break. let's see the morning session, it got a boost from a weakening yen. the yen was weaker. for six consecutive sessions, right now it is unchanged. 102, up .6%.yen, searching for a third consecutive session. look at these japanese stocks, do keep an eye on him for the rest of the afternoon. to be theined 5.5% biggest gainers on the nikkei, koki,g to sell hitachi for as much as 12%. da dropped 7%.
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they dropped their forecast by 33% after reporting weaker than expected results for the first cap. 102,apanese yen at unchanged after six straight sessions of weakness. a new forecast for asia, gloomy outlook for china and mongolia, but better news for thailand with rising credit everywhere. we have been sifting through the report. not a genetic shift. they're changing their forecast shift, theymatic are changing their forecast. expecting it to pick up a little bit. they are talking about broad resilience in the region. 6.2% next year. the forecast for china as you said, unchanged for 2017.
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but for 2018, the previous forecast of growth, taking that down to 6.3% from the ongoing reform process. it is from services to consumption. they think it will continue. but that output growth as a result of cutting, this will going into these excess capacity type of industries. thailand has standout growth. from 2.5% to 3.1%. significant upgrade. again, picking up in 2017 and 2018 as well. the biggest losers, mongolia. stagnant growth for 2016. rishaad: they are lucky to have it.
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>> and growth coming down to 3.5%. april we were expecting growth of 6.2%. despite stimulus, the debt will continue to drive. >> the chairman says its failed shipping line could have survived with a little help from creditors. seoul, hering in talked about supply change disruptions. ,e have been covering a story for weeks. what did the chairman have to say? >> this was his first real public comment about the issues since receiving protection. said he failed to persuade creditors to give more help. inject they planned to
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451 billion u.s. dollars, which was rejected. the development bank, the said that whatr, they had proposed in the restructuring plan was not enough. ofy said it fell short creditors to provide help. around $890 million, to raise adjustments and extend maturity dates on some loans. a this hearing in seoul, said quick revival would be key. they have to see what happens to the container liner and submit a proposal for a possible revival on shipping in december. >> they were accused that they -- savede shaped the
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the container shipping line. but we have heard from the director, as well. what did he have to say? >> there is a little finger-pointing going on. while he was saying his creditors could have helped moore, his main creditors said, they could have gotten more help from the main shareholder or shipping, korea airlines. they are all part of the group which comes into this family. the shareholder made no move to provide liquidity. sendhad met in august to -- set up a contingency plan. established never because they could not share confidential information about their clients with the bank.
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it is a little bit of he said, she said. they wanted money that had been loaned. but it was only after they had filed. >> thanks so much for that. singapore's property market seeing its steepest fall in seven years and its longest quarterly losing streak on record. see further declines before he will consider buying in. >> [indiscernible] 20%.uld go down to >> indonesia recently taxemented a very ambitious amnesty program. do you think it is on the right track, and how successful can it be? >> in the past, because of the of the economy, in
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indonesia they have a very big underground economy. so many businesses smuggle into this system. this is a weakness of the indonesian economy. i would like to say indonesian people are very fortunate to have such a good president. he makes this very important the people,benefit the country, the government. that, our taxpayers would governmentd, and
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[indiscernible] >> there is a chinese saying you included in your book that wealth does not cost a three generations. right now you have your grandson, the third generation. how do you view the future of the company? >> when they did not alert about ,he changing of the technology they did not alert about the changing of the political situation, and the economic situation. then they will be failing. >> you are one of the richest men in asia. you are worth about $2.2 billion. is that an underestimation of the family's wealth? >> my math is not so good. [laughter] think that is about right,
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and overestimation or an underestimation? >> it is an underestimation. a big one. was speaking to our correspondent. coming up next, struggling to gain traction, we will take a look what is holding back global growth. ♪
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rishaad: a quick check of the latest headlines. grading the u.s. economy this year, and global growth. the upgraded outlook for britain, proving more resilient than expected. >> the u.k., the situation is
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quite uncertain. accounte a very long deficits. it is unlikely they can sustain the flows of inward investment that has allowed them to run a deficit. so there needs to be an adjustment of the exchange rate. we have seen that starting to happen. reality of that sinks in, as it is been doing this week, the currency is evaluating further. a kid devalue further still. icad and quantitative easing. we are told that could mean 10 billion euros a month. it climbs to a three year high against the pound. will draghi has said qe continue until next march, or beyond, if necessary. rishaad: the chief executive has
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apologized to australian parliamentary's, saying the bank has not met its standards. the second head of the big four lenders, talking about financial rates. while the profits are large, they're less than 1%. angie: welcome back. we have our guest, michael every. let's quickly pick up on that eu story. it is what is chilling the markets a little. tantrumion of a temper when he mentioned the easing and, the market went a little crazy. a little bit. let me make a number of key points. first of all, very importantly, what we have seen from the u.s. is that when qe stops, and it will come up bond yields go
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down, they do not go up. when you do qe you are in inject an into the economy. when you take it away, equities might go down. bond yields certainly go down. if we see bond yields rise of the moment, that will be reversed after this tension is over. will it be removed? that is a different question. if inflation is well below target, what was it for? that is the point. qe is created, asset bubbles in the wrong places. rishaad: you could argue that. they could argue this until they have success. it is like saying the beatings continue until morale improves. [laughter] >> that seems to be what they're say it is working, and gradually admit it is not. >> but the question is, who is beating whom?
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>> you talk about the risks being everywhere. at 7.6% overuan the next few months. what is the most dangerous on flowing consequences of a result of that comes true? that, i were to see think it would exacerbate a lot of the pressure point we had on the global economy. we already had a wall of deflation hitting us. political risks rising, people talking about protectionism coming back with a much weaker chinese currency. obviously, it would drive down emerging markets while other markets are looking wobbly. regrettably, i see that is inevitable at some stage. >> you talked about this wall of deflation. data fromoday with taiwan, there were lowered expectations.
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philippines and south korea, much higher than the forecast. are we discounting too much the possibility that there is upside risks to inflation, that when it comes it will be too late to react? >> that is a possibility. we have to say how we measure inflation is fluid everywhere. everyone knows on the high street, certain things feel more expensive than they did a few years ago. we can see clear asset price inflation, especially property. that should be included but is not. overall, if we look at supplies and demand, globally, there is not enough demand. for that reason, aggregate inflation -- deflation is a bigger risk. >> we talk every day about the u.s. election, it seems. >> what is that? [laughter] a vice presidential debate, have you just woken up?
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debatevice presidential was more solid on policy, less colorful, to be sure. some think we heard entrenched differences finally from the candidates. but some more substantive talk on the differences. >> i guess so. but it is relative. the first debate did not increase a particularly edifying spectacle. neutral, wondering what democracy was about, you would not be completely sold on the subject. [laughter] rishaad: how much is what is going on in the currency markets a function of what this presidential election will throw out? bighere is a risk of a period of volatility after the election. that, thebeyond central banks are the main players. everyone is trying to figure out where we go. we started out reducing growth
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outlook. this is something i have been with clients for a long time. structurally, something we will not see. changed?what has why is the world economy trudging through treacle? >> it has not worked for a long period of time. is concept of economics fluid, ludicrously simplistic and unrealistic in terms of how it actually works. but it works well for 20 years at a time, not looking at the underlying break downs. that breakdown has now happened. we need to see a complete cycle. once things break, they do not get put together again. people have the view that it is if the government gets out of the way things will return to equilibrium. but it will not.
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economies are far too complex to be in equilibrium to start with. we cannot temporarily veer off course with something we should be getting back to. we will see a structural policy change to address that. >> of that is a criticism, what is the solution? >> that involves politics more than interest rates. >> a dangerous solution, somewhat say. >> it depends what a formal solution would take. but political steps have gotten us to where we are and have created the structure we are in. central banks have tried to use monetary policy to lever our way out of it. beatrecovery will have to politics. >> it is a problem of how we measure or looking at that measure and using something tangible, like interest rates to get something out of that? i know it is very abstract. but when you try and do something over and over again,
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being the definition of insanity, how do you fix the measure? 100 years ago it was easy. manufacturing, cost of labor, so forth. now it is services, digital, all these other things. >> uncertain economy. >> at the server, the cloud. >> it is another excellent point. i do not think we do a very good job measuring what we're actually looking at. but the first thing we need to do, and it will sound controversial to me, is throw your textbook out the window. it is rubbish. completely misunderstands. rishaad: if you are studying economics, do not listen to him. [laughter] >> send the textbook to someone else. disaster,is not a just a slow, steady grind we are in at the moment. >> it is a slow, steady grind. but we are cognizant of the fact
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that the political temperature is rising. eventually if we look long enough ahead, this your or four years from now, there will be a major political backlash that will make exit look like nothing. but we have to act on it. >> there is no doubt -- i will not disagree with you, the fact that over the last eight years we have seen stimulus and austerity, which you could say is a political solution to stimulus. >> or, the disease is worse than the cure. >> it does not seem anything is working. you could take everything away and let the markets sort itself out. let it go. >> it is adjusting you bring it up. that is more of an austrian response. we have the mother of all global recessions if we did. i think smith said something important, one quote never he saidbout from him,
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profits are highest in countries going the fastest. that is our fundamental global problem. the capital is not circulating. we have capital pulling in some places, but not enough money and others. until we can rebalance the flows through the global economy to increase median income for consumers so they can spend, we will need further investment. until then, we are stuck. rishaad: thank you so much. htc back inmoment, the smartphone business. ♪
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rishaad: back with "asia edge," htc hoping for a comeback in the smartphone market. with help from google, they will manufacture the new pixel
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handset to go head-to-head with apple's iphone. is this pairing a good match? >> it could be. htc's roots go back to being a contract manufacturer. htc produced other companies. this is going back to their roots. they struggled, headwind to sales for a number of years. there is no doubt google -- rishaad: that is just gone. but a 70% fall in sales. >> is that as long before the rise of samsung. had an advantage, they lost it. but they want to come back as a contract manufacturer. they have a history there. rishaad: the rival of this partnership against apple, nipping at their heels.
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>> analysts see that as positive, these phones are an integrative package. the software and the hardware are tied together. by having google control the engineering and design, they can andource like foxconn, replicate that success. rishaad: thank you for that, our technology reporter. we see this marriage between htc and google. >> bloomberg markets middle east at the top of the hour as we wrap up asia edge, standing by in dubai. what will we talk about today? >> a busy show, as always. we will continue the conversation on global monetary policy, comments from members of the federal reserve. what does that mean for various investment strategies? we will talk that -- talk about that. and, what is happening in the
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saudi economy. and we will discuss the latest pmi data. we will see you at the top of the hour. ♪
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♪ yousef: attack and defense. the vice presidential debate proves every bit as combative between the meeting between trump and clinton. angie: the imf as to the gloom surrounding turkey's growth forecast. yousef: stocks and bonds fall talks, plus new speculation of a hike this year. angie: and less than a


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